Energy Compromises?

by Victor Davis Hanson

Private Papers

A shorter version of this essay recently appeared in the National Post (Toronto).

We must be careful in warning about an ‘energy crisis,’ since past Cassandras-of-doom have been habitually proven wrong by new oil finds and continual fuel savings through novel technologies.

Over the past thirty years, each time an alarmist screeched about the need for a Manhattan-like project to draw fuel from North American oil shale, or to reinvent the automobile, it seemed that oil producers instead turned on the taps, or the world sank into recession, causing petroleum prices to collapse — and all of us to go back to our old unexamined habits of energy acquisition and consumption. No wonder private enterprise is skeptical of perennial energy panic, when professors, legislators, and pundits advise and lecture — and businessmen alone pay when they prove to be wrong.

But things may be changing in this recent energy Perfect Storm, one that really does imperil our very livelihood. Fuel-importing India and China are suddenly buying all the petroleum they can contract, radically changing not only the world economy, but also altering geopolitical relationships in as yet unforeseen ways. Globalization is extending Western lifestyles to new billions worldwide. Utopian environmental restrictions in affluent societies circumscribe energy exploration and production while doing very little to curb its consumption.

Yet there is something about $2.70 gas and the threat of another 9/11 that changes even the most entrenched ideas about our current energy habits. The Right used to believe that the omniscient market could adjudicate almost everything: let the specter of eventual $5-a-gallon gas deal with the problem of driving a 7,000-pound, 10-mile-per-gallon behemoth down the street to the supermarket. When the tab at the gas station get too high, or so free-market gospel preaches, people can make their own adjustments far more efficiently than clumsy bureaucrats and distant functionaries.

While persuasive in theory, such laizze-faire policy, in fact, is fraught with peril in the case of national energy policy. Whereas Detroit turns out too many gas-guzzling SUVs and trucks, Japan, reminiscent of the 1970s, is once again ahead of the curve and capturing market share in providing more fuel efficient and better hybrid cars — with long-term detrimental results for the US economy, as crisis returns to the American automobile industry.

While high gas prices would eventually determine consumer choices, in the meantime billions of petrol dollars will continue to pile up in Iran and the Gulf, and thus fuel everything from Teheran’s nuclear ambitions to world-wide Wahhabist madrassas and mosques. Imported energy is increasingly at the heart of mounting U.S. trade imbalances and the weak dollar, as America is learning that its privileged lifestyle is now emulated by 2 billion Chinese and Indians, who will work longer and more cheaply to ensure access to the energy abroad to fuel their similar materialist dreams.

An historical transfer of massive capital is underway. The world is sending its hard-earned wealth to oil-producing nations, who unlike China, India, Japan, Europe, and the United States, are mostly accidentally profitable. Most of them have done none of the hard work of creating industry or enacting market reforms to ensure success through manufacturing, finance, or knowledge-based industries. The Saudis merely pump the oil that others have found and developed for them at $5 a barrel and sell it for $55.

The Indians are transforming their entire economy; the Iranians, in contrast, are prosperous despite their Dark-Age worldview. The Chinese are earning their affluence though market reforms, the parasitical Gulf States by an accident of geology.

Indeed, we can witness how pernicious price-gouging is to the global economy, not just in the impoverishment that it causes the Third-World importing nations, but through the disruptions that plague the profiteers as well. Nigeria, Venezuela, Mexico, Saudi Arabia, Iran, and Algeria are some of the most corrupt, unstable, and non-transparent societies on the globe, in part because their oil-rich elites have been able to masque their failures with cash or bribe their way out of needed reform.

Meanwhile, the Left is straight jacketed by the same purist creeds. We have been told for three decades that solar power and hydrogen will save us, along with windmills and wave-machines, even though such alternate sources of powers are presently either impractical or years away from fruition. Environmentalists insist that coal is too dirty and hot, nuclear power too dangerous, hydroelectric too injurious to native streams and fish — almost everything too something to exploit fully.

In consequence, as we bicker and remain paralyzed, the cost of energy skyrockets, many of our enemies grow even more awash in cash, and our financial and security options are increasingly curtailed by energy considerations.

The answer to the dilemma lies in two general principles that define all political compromise: the acceptance that we face no perfect selection between good and bad alternatives, but at this late hour only a decision between bad and worse choices. Second, there is no single solution, but a medley of incremental changes that alone in their aggregate can allow us to maintain our political autonomy, financial health, and standard of living.

How then do we produce more energy and use less, to drive down world’s prices for petroleum, helping both ourselves and the world economy at large? Environmentalists must outgrow their Three-Mile-Island/Chernobyl-era paranoia and embrace nuclear power. It is not a perfect answer, and demands care in both its operation and storage of its waste. Yet the nuclear option does not cause global warming, does not release toxic clouds of smoke into the environment, and does not entail scarring the landscape through extensive mines.

Were the United States producing 75% rather than 20% percent of its electrical power needs from nuclear power plants, natural gas prices would plummet, and the fuel could be used exclusively, as it should, to heat homes rather than to fire generators. Off-peak, nuclear-produced electricity is ideal for recharging at night new hybrid and electrical commuter cars. Again, we do not have to scrap our SUVs tomorrow, just gradually accept that one alternatively-fueled, small commuter car per household should be the norm for short-term trips to work and nearby shopping.

Drilling in Alaska, exploring for new wells off the continental coast, or exploiting shale oil in North America should likewise all be on the table. If the United States does not encourage and tap new sources of fossil fuels, the global price will only climb. Poorly scrutinized development in the fragile Russian Arctic, the already polluted Persian Gulf, or off the once pristine coast of Africa will only accelerate.  In contrast, North Americans can find sources of energy in ways that are far more environmentally sound than the practices of other nations; in an increasingly globalized landscape, we owe it ourselves in an ethical sense to produce carefully the energy that we now consume and seem to demand it be produced mostly by others.

Conservatives, who favor nuclear power and more traditional energy exploration, should embrace mandated conservation as critical — and yet improbable without state sanction. Contemporary energy-efficient homes, fuel-thrifty automobiles, and more economical appliances all evolved as a result of government targets, public right-to-know laws, and, yes, occasional subsidies.

Again, we all trust in free markets, but must remember that the defeat of Japan through nuclear weaponry, our present driving on an integrated freeway system, and the airports that facilitate modern jet travel were all possible only through government partnerships with private enterprise. We need something like that on a far greater scale to ensure that we squeeze out the most use of every cubic foot of natural gas and gallon of fuel we burn.

Increased production of oil and gas, greater reliance on nuclear power, far more fuel efficient automobiles and homes, alternate energy consumption from hybrid cars to ethanol blended fuels — right now all this can get us through the present mess until we reach the promised utopia of a non-polluting, endless supply of wind, solar, or hydrogen. And doing the practicable, rather than waiting for the theoretical, might also ensure our survival just in case such energy nirvanas turn out to be mythical rather than right on the horizon.

This new consensus will require a radical change in attitude. An environmentalist must think of the dangers of nuclear power as far less pernicious than the harm of coal plants. A conservative should accept that government guidance in the domestic market is not as bad as empowering a nuclear Iran or Wahhabist Saudi Arabia.

While dreamers insist on waiting for a world of windmills and rooftop photovoltaic cells, they should concede that insistence on the future perfect solution will be the death of the good option right now, given that 30 years of energy crises have still not yet produced a viable alternative to fossil fuels and nuclear power. Finally, conservatives, as their name implies, should conserve; and liberals must be liberal and open to once taboo solutions to old problems.

©2005 Victor Davis Hanson

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